Dish sizes up launch of a 5G network core in at least one market in 2020

Dish Network is still waiting to close its acquisition of Sprint's Boost prepaid business before it can go full steam ahead on its 5G network planning. Meanwhile, Dish chairman Charlie Ergen is hopeful Dish can get a 5G network core nailed up in at least one US market this year.

Speaking on today's earnings call, Ergen said the timing on that core network launch will also hinge on the extent that T-Mobile cooperates in the wake of its merger with Sprint; he predicted that Dish will be in the postpaid mobile business and enjoying owner's economics a year from now.

When Dish can close on the Boost business isn't set. Ergen said it could be June 1 at the earliest or could extend out to July 1 if certain conditions, including the ability to cross-provision Boost customers on the T-Mobile network, are not met in time.

According to New Street Research, Boost is gearing up to launch service on the T-Mobile network in mid-May and that T-Mobile execs said yesterday that they expect the Boost transaction to close in June.

Tom Cullen, Dish's EVP of corporate development, said preparing for the Boost integration represents the first critical step, to be followed by a finalization of Dish's vendor selection and the assembling of the full 5G network plan.

Dish has already selected Mavenir as its first 5G vendor pick and anticipates more vendors to join the list in the third quarter and to be in position to provide more detail on the 5G network plan on the next earnings call. "By no means will they be the only vendor that we use," Ergen said, noting that Mavenir was the first to meet Dish's guidelines.

Mavenir fits in with Dish's plan to deploy a fully-virtualized, open radio access network for 5G. "We now know ORAN is real; it's not pie-in-the-sky," Ergen said.

Ergen is also pressing Dish and its technology partners to innovate and lead the 5G market since Huawei and other Chinese suppliers won't be playing in the US 5G network rollout due to ongoing national security concerns.

"Huawei is really good. The Chinese equipment is really good. It's best in class," Ergen said. "We shouldn't just try to be as good as the Chinese manufactures – we should be better."

Funding questions
Ergen is also confident that Dish remains in good position to fund the 5G network, which it expects to cost around $10 billion (some analysts believe it will be much higher than that).

The $10 billion earmarked for the 5G build doesn't include spectrum purchases, but does include a "total macro layer" that will provide Dish with scaled, nationwide coverage and put it "well beyond the FCC requirements."

Dish believes it will be able to fund the 5G network in part from cash generated from its pay-TV business as well as the prepaid Boost business, along with the $1 billion of equity it has already raised. Ergen, who noted that Dish has also paid down about $2.5 billion in debt in the last 13 months, added that Dish doesn't need to have the full $10 billion salted away right at this moment.

"We're not standing still … the funding part is not the part that's keeping us up at night at this point," he said.

Dish is still forecasting 2020 wireless expenditures of $250 million to $500 million, but expects to be at the lower part of that range due to the business impact of the pandemic.

Meanwhile, Dish has already halted its progress on the earlier narrowband-IoT network, resulting in a $253 million non-cash impairment charge from certain assets, including satellites, that won't be used for the 5G network.

But Ergen isn't fretting about the write-down for a project that wasn't going to "move the needle" on how people in the US communicate or put Dish in a leadership position.

"Now we're building a broadband network that will be the envy of the world," he boasted.

New Street Research shares Ergen's bullishness, believing Dish's multiyear mobile plan could be worth $100 billion over time. "Dish truly has the potential to disrupt the US wireless market," the analysts wrote in a note issued today, believing that Dish's 5G network could drive a cost per gigabyte that is an astounding 3,550% lower than wireless incumbents.